A perfectly competitive firm should produce in the short run:
a. only if price exceeds average total cost.
b. even if price is less than average variable cost.
c. as long as price exceeds average fixed cost.
d. as long as price exceeds average variable cost.
d
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Total Government Debt is the sum of previous surplus and deficits.
A. True B. False C. Uncertain
How do RBC theorists answer the objection that there have been few examples of large and easily measurable real shocks to the U.S. economy in recent decades?
What will be an ideal response?
In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
Which diagram above illustrates the effects on the peanut butter market, if severe flooding destroys a large portion of the peanut crop in the economy?
A. (1) B. (2) C. (3) D. (4)
The market
A. Always provides the optimal mix of goods and services. B. On its own may not always provide the optimal mix of goods and services. C. Always provides a better mix of goods and services without government intervention than it does with government intervention. D. May not produce the optimal mix of output, which is known as government failure.